Analyst Note| Karen Andersen |
We’re maintaining our $690 fair value estimate for Regeneron following fourth-quarter results that were in line with our expectations, apart from significant one-time revenue from a large order for COVID-19 antibody Ronapreve in Japan. While we’ve added a placeholder for potential future COVID-19 antibody revenue to our model (to account for a next-generation product entering development this year) and slightly boosted our long-term sales assumptions for immunology drug Dupixent with additional pipeline progress, we’ve also increased our operating expense estimate to account for Regeneron’s continuing push into larger oncology clinical trials and more investment in the launch of Libtayo. We think the shares are slightly overvalued at recent prices, although we’re carefully watching for upcoming catalysts—like data for Dupixent in the large indication of chronic obstructive pulmonary disease and progress with novel CRISPR-based drug candidates like NTLA-2001 (partnered with Intellia)—for potential upside to our valuation. We continue to see Regeneron’s established presence in ophthalmology, steady Dupixent growth, and advancing oncology pipeline as supporting a narrow moat.